Title: “Dominican Drug Kingpin’s Money Laundering Scheme: The Caribbean Nation as a Transshipment Point and Money Laundering Hub”

Drug Trafficking Ring Takedown Reveals Money Laundering Activities in Dominican Republic

The recent dismantling of a major drug trafficking ring in the Dominican Republic has underscored the country’s role as both a transshipment point and money laundering hub for international illicit drug proceeds.

$260 Million Drug Money Laundered in Three Years

A press release from the Dominican Republic Attorney General’s Office on July 31 revealed that over $260 million in drug money was laundered through the organization led by notorious crime boss, César Emilio Peralta, alias “El Abusador,” between 2018 and 2021.

Arrests and Seizures in Connection to the Money Laundering Operation

The alleged money launderer, Lyas Eduardo Velásquez Cordero, alias “El Pequeño,” was charged with managing the operation using shell companies. Velásquez Cordero was arrested on July 31, alongside another suspected member, Rhinel Rodríguez, alias “Fido.” During Velásquez Cordero’s apprehension, authorities seized approximately $162,000 in cash, a $150,000 Range Rover, as well as a Ferrari and other luxury vehicles.

Capture of César Emilio Peralta, the “Cocaine King”

Peralta, who previously oversaw the drug ring’s operations in Santo Domingo, was detained in Colombia’s Cartagena port city in December 2019. Known as the “cocaine king,” Peralta reportedly used corrupt police and government officials and maintained connections to Mexican organized crime groups. A nightclub impresario, Peralta is accused of trafficking cocaine into the United States and Europe.

Arrest of Key Members of the Criminal Organization

To date, authorities have apprehended 23 of the criminal group’s 30 members.

Prolific Money Laundering Operation Amplifies Concerns over the Dominican Republic

Substantial Profits from the Tourism Sector

The sheer scale of the money laundering operation underscores the attractive environment for international drug shipments and illicit financial flows in the Dominican Republic. The estimated $7 million Peralta’s organization laundered each month highlights the substantial profits the country’s vibrant tourism sector, which generated over $7 billion in revenue in 2019 alone, generates annually.

Significant Target for Money Laundering Threats

The network also facilitated bulk cash deliveries from the United States to launder in the Dominican Republic, making it a significant target for the US Treasury Department’s Office of Foreign Assets Control (OFAC) that identified Peralta and eight associates as “significant foreign narcotics traffickers” back in August 2019.

Country’s Vulnerability to Money Laundering Threats

Moderate Risk for Money Laundering

According to the Basel Institute on Governance’s 2020 Anti-Money Laundering Index, the Dominican Republic is considered to have a moderate risk for money laundering.

Vulnerability to Money Laundering Threats, as per US State Department INCSR

However, the US State Department International Narcotics Control Strategy Report (INCSR) 2020 went further, citing corruption within the government and private sector, international cartels, a large informal economy, and weak financial controls as elements making the country more vulnerable to money laundering threats.

European Union’s Concerns over Caribbean Countries’ Compliance with Anti-Money Laundering Regulations

The EU recently flagged a number of Caribbean countries, including the Bahamas, Barbados, and Jamaica, as having “strategic deficiencies” regarding their efforts to combat money laundering. The Dominican Republic may soon face similar scrutiny.